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State
Revolving Fund

Program Highlights

State Revolving Fund

What is State Revolving Fund (SRF)?

SRF programs provide financial savings for projects
that benefit the environment, including protection of public health and
conservation of local watersheds.
Federal and state contributions fund loans for a wide variety of water
quality projects including all types of stormwater, watershed protection or restoration, and
estuary management projects, as well as more traditional municipal
wastewater treatment projects including water reuse and
conservation projects.

It allows states to provide funding for their
highest-priority water quality needs. Funds to establish or capitalize the
Clean Water State Revolving Fund (CWSRF) programs are provided through federal government grants and state
matching funds that are equal to 20 percent of federal government grants.
CWSRF monies are loaned to communities at lower than market rate
interest-rates, and loan repayments are recycled back into the program
to fund additional water quality protection projects. The revolving
nature of these programs provides for an ongoing funding source that
will last far into the future.

SRF in Florida

Funding
for wastewater construction began in 1957 with the
Federal construction grants program and accelerated dramatically
with the passage of the Clean Water Act in 1972. During the next 16
years Florida received an average of $125 million grant dollars per
year. Amendments to the Clean Water Act in 1987 called for the
replacement of the long-standing federal Construction Grants program
with the innovative CWSRF program.

The first loans from the Clean Water SRF were made in 1989 to the City
of Tampa for $17,928,000. On March 7, 2011, the program exceeded $3
billion in loans. The Safe Drinking Water Act of 1996 established a
Drinking Water
SRF program to protect the safety of drinking water. The Drinking Water SRF made its first
grant in August 1998 to Lloyd Water Works, and its first loan to Tradewinds Utilities in
October 1998.

Today, the SRF
program is by far DEP's largest funding program and makes $200-300
million or more available, primarily to local governments, each year.
Funds are currently available for Clean Water and Drinking Water SRF
projects.

Interest Rates

The CWSRF financing rate is determined using the Bond Buyer 20-Bond
GO Index average market rate for the full weeks occurring during the
three months in the preceding fiscal quarter and applying that average
rate to a formula which also uses the affordability index and population
served or to be served as variables in the calculation. The
affordability calculation spreadsheet is available to provide an
estimation of the loan financing rate. Note that the rate
calculated is only valid in the current quarter. There are up to 1.2% in
additional rate reductions that may be assessed based on Davis Bacon
requirements, Buy American requirements, asset management plan,
and “green” projects. The DWSRF financing rate is 60% of the market rate.

CWSRF Financing Rate Formula

FR = MR – 4 + (4/(1+(100/AI)3)) – 1/Log(P)

Where:

FR = financing rate
MR = Market Rate
AI = Affordability Index
P = Population served or to be served by the sponsor